Shell’s profit slumps in 2020 due to COVID pandemic

 Royal Dutch Shell’s profit last year dropped to its lowest in at least 20 years as the coronavirus pandemic hit energy demand worldwide, though the company’s retail network and trading business helped cushion the blow.

The Anglo-Dutch oil major’s annual profit slumped 71 percent to $4.8bn as its oil and gas production and profits from refining crude into fuels dropped sharply.

In a sign of confidence, however, Shell said it planned to raise its dividend in the first quarter of 2021, which would be the second slight increase since it slashed its payout by two-thirds at the start of last year due to the pandemic.

Analysts say while Shell missed forecasts for both its fourth-quarter profit and cash flow, the results overall were not as bad as feared, especially after rival British BP posted a loss of $5.7bn earlier this week.

“We are coming out of 2020 with a stronger balance sheet,” Chief Executive Officer Ben van Beurden said in a statement.

Shell shares were little changed at 09:15 GMT, slightly underperforming the broader European energy index.

Shares in Shell collapsed in 2020 along with rivals to hit 878.1 pence on October 28, their lowest in more than a quarter of a century. They have recovered since but are still down 40 percent since the end of 2019, before COVID-19 savaged oil markets.

US rivals Exxon Mobil and Chevron reported huge losses in 2020, battered by the prolonged slump in energy demand during pandemic lockdowns. BP’s loss was it’s first in 10 years while Exxon reported a massive $22.4bn annual loss, its first as a public company.

Low carbon strategy

Shell’s results come a week before it presents its long-term strategy to become a net-zero emissions company by the middle of the century and tries to persuade investors it has a profitable future in a low-carbon world.

It is planning a major restructuring as part of its plan to reduce greenhouse gas emissions and aims to cut 9,000 jobs or more than 10 percent of its workforce.

The reorganisation will lead to additional annual savings of about $2-2.5bn by 2022, above and beyond cuts of $3-4bn announced last year.

Like its rivals, Shell responded to the unprecedented drop in oil and gas demand last year by cutting spending sharply.

Shell invested $17.8bn in new projects in 2020, about $6bn less than a year earlier, and slashed its operating costs by one percent to $32.5bn, helping its cash flow.

Reducing costs is vital for Shell’s plans to move into the crowded power sector and renewable energy where margins are typically lower than for fossil fuels.

It is betting on its expertise in power trading and rapid growth in hydrogen and biofuels markets as it shifts away from oil, rather than joining rivals in a scramble for renewable power assets.

Despite a 28 percent drop in fuel sales last year, Shell’s adjusted earnings from trading and marketing, which includes sales at its global network of more than 45,000 filling stations, only fell 3 percent from a year earlier to $4.6bn.

But at the same time, Shell’s cash flow was down nearly a fifth from 2019 while its debt-to-equity ratio rose to 32 percent from 29 percent, exceeding the company’s target.

At least 9 soldiers killed in latest central Mali attack

 The Malian army has said at least nine soldiers were killed and six others wounded following an ambush in the country’s volatile centre.

The attack occurred at about 6:15am (06:15 GMT) on Wednesday near the village of Boni in the Mopti region, a hotspot of recent violence.

In a Twitter post, the army said it hit back with air support from the French Barkhane force and the Malian air forces.

Army spokesman Colonel Soulemane Dembele told Reuters news agency about 20 attackers were also killed in the forces’ response.

Mopti, Mali – map

Mali has been plagued by a brutal conflict that began as a separatist movement in the north but soon devolved into a multitude of armed groups jockeying for control in the country’s central and northern regions.

The insecurity has spread across the arid scrublands of the Sahel, into Burkina Faso and Niger, with groups exploiting the poverty of marginalised communities and inflaming tensions between ethnic groups.

Attacks grew fivefold between 2016 and 2020, with 4,000 people killed in the three countries last year, up from about 770 in 2016, according to the United Nations.

It was not clear which group carried out the latest attack.

Rebel attacks in central Mali typically involve roadside bombs or hit-and-run raids on motorbikes or pickups.

The region has seen a string of deadly attacks since the start of the year, including a roadside bomb that killed four United Nations peacekeepers from Ivory Coast.

French and Malian troops have also carried out a joint mission in the area, called Operation Eclipse. According to a Malian army statement on January 26, “100 terrorists were neutralised” in the operation.

The deteriorating security situation has created an enormous humanitarian crisis across the Sahel, destroying fragile agricultural economies and hobbling aid efforts.

Ghana listed for 2.4m doses of Covid-19 vaccine by March

 There is some rare ray of hope in Ghana’s fight against the novel coronavirus pandemic.

Since President Akufo-Addo’s announcement of steps to secure a vaccine, the first substantial progress in securing the products have been made public.

President Akufo-Addo had, in his Sunday night update on the nation’s measures regarding the pandemic, indicated that the country is expected to receive its first consignment of the vaccines in March 2021.

“..we are hopeful that, by the end of June, a total of 17.6 million vaccine doses would have been procured for the Ghanaian people,” he said January 31, 2021.

However, the latest update on the UN-led COVAX Facility, of which Ghana is a participant has revealed that the country is earmarked to take delivery of 2.4 million doses of the AstraZeneca vaccine which is licensed to the Serum Institute of India (AZ/SII).

Ghana is among 145 counties listed to receive vaccines from a number of suppliers through the COVAX Facility according to the World Health Organisation (WHO).

Per Wednesday’s announcement, “… delivery is estimated to begin as of late February, subject to WHO EUL, manufacturing supply capacity and completion of pre-requisites…”

According to the facility’s interim distribution document on February 3, 2021, the vaccine is expected to be administered to persons in key sectors such as health workers in the first quarter.

“This is in line with the facility’s target to reach at least 3% population coverage in all countries in the first half of the year, enough to protect the most vulnerable groups such as healthcare workers,” the statement said.

Meanwhile, a Pharmacist and Research Fellow at the Centre for Democratic Development (CDD-Ghana), has proposed that Ghana diversifies its sources for Covid-19 vaccine procurement.

Speaking on JoyNews’ PM Express Tuesday, Dr Kwame Asiedu Sarpong is of the view that channeling all efforts in one direction may not do the country any good, hence the need to exploit all possible routes.

“We should diversify our route, so we can go in for the Russian vaccines that haven’t bilateral negotiations, similar with the UK, call in for AstraZeneca, we can go in for Novavax and go in for Covax as well.”